The democratically elected government of Albania's pro-Western
President Sali Berisha has fallen victim to a slow-motion coup
d''tat launched by the Socialist Party, successor to the Communist
Party which dominated the mountainous Balkan country from 1944 to
1992. On March 11, President Berisha was forced to appoint Bashkim
Fino, an unelected representative of the Socialist Party, as Prime
Minister. The appointment was an attempt to contain a mushrooming
armed rebellion-encouraged by the Socialists-that has engulfed the
southern half of Albania and now has swept up to the capital of
Tirana. The Socialists' efforts to undermine President Berisha, who
defeated them decisively in the 1992 elections and again in the
controversial 1996 elections, threaten to reverse Albania's
hard-won democratic and economic reforms. Moreover, their efforts
to destabilize Berisha's regime could transform Albania from a
reliable Western ally in the volatile Balkans into a long-term
source of instability that threatens Albania's neighbors.

Rather than speak out against these dangerous developments, the
Clinton Administration has pressured President Berisha relentlessly
to make concessions to the Socialists. The Administration has
called for a rerun of Albania's May 1996 elections, despite the
fact that those elections were freer and fairer than many others
that have taken place in post-Communist nations, including Russia's
elections last June. This action, in effect, has helped to
de-legitimize the Berisha government and to encourage the spread of
anarchy in that country of 3.5 million. The Administration now must
take steps to limit the damage to Western interests in the Balkans
by insisting that the Socialists, who have capitalized on Berisha's
problems to return to power, abide by their agreement with
Berisha's crumbling government, hold the promised free elections,
and restore law and order.

Sadly, even if this is done, there is little hope that Berisha's
free-market economic reforms and pro-Western foreign policy will
survive intact. The Socialists are sure to expand their strength in
parliament-if not win the elections outright-by exploiting the
bitterness triggered by Albania's current economic and political
crises.

The unholy alliance: greed and revenge. The proximate cause for
recent widespread disaffection with the Berisha government is its
perceived failure to protect Albanians from painful economic losses
sustained in the collapse of several fraudulent investment funds
that functioned essentially as pyramid schemes. While similar
get-rich-quick schemes have plagued every former Communist country,
Albania has been particularly vulnerable because it is the poorest
and most isolated country in Europe. The president of the Socialist
Party, Fatos Nano, predicted to members of the British Helsinki
Human Rights Group last summer that pyramid schemes, not elections,
would bring down the Berisha government. In classic Leninist
fashion, the Socialists worked to turn an economic crisis into a
political opportunity by exploiting a festering situation that
their economic policies had helped to create.

When the pyramids began to collapse in January, what began as
popular agitation for the refund of lost savings turned into
political unrest. Berisha's Socialist-dominated opposition has
sought to turn that unrest into a movement to overthrow the
government. The Socialists have charged that Berisha's government
neglected to protect investors from losses and used profits from
investment funds to finance its winning election campaign. In fact,
however, at least one government official was pilloried by an
opposition newspaper when he warned against investing in one scheme
with an exorbitant rate of return. Moreover, two of the pyramid
schemes that collapsed in the south, which was hardest hit by the
scams, were affiliated with opposition parties.

The Socialists were aided by Albania's mafia, which greatly
resented the government's efforts to crack down on its lucrative
smuggling operations last fall. Significantly, anti-government
demonstrations first developed into an armed rebellion in the
seaport of Vlore, a staging area for smuggling drugs, illegal
immigrants, and cigarettes into Italy 40 miles west across the
Adriatic Sea. After the insurgents seized control of Vlore on March
2, they released the inmates of local prisons, who-having nothing
to lose and much to gain-promptly joined the rebellion.

The Vlore uprising set the stage for a string of rebel victories
in southern Albania, where the Socialists enjoy strong support but
support for Berisha, a northerner, is weakest. Although the
Socialists deny they control the rebellion, they have encouraged
and maintained contact with rebel groups whose political demands
closely parallel their own. Rather than call for a cooling-off
period and a return to normalcy to help rid the country of
thousands of armed thugs who have killed more than 40 people in
rebel-held towns so far, the Socialists have used the rebels as a
source of leverage against Berisha.

While the U.S. and European countries pressured Berisha to seek
a political solution, the rebels continued shooting and advancing
on Tirana. Opposition demands have escalated as the rebels grew
stronger. Berisha signed an agreement with opposition party leaders
on March 6, only to see it annulled by the same leaders hours
later. Berisha then agreed to hold early elections by June 1 and
appointed Fino, a Socialist former mayor from the south, on March
11 to head a government of national reconciliation. While Berisha
has attempted to meet the demands, it is not clear that the
Socialists will abide by their promises to hold free elections. A
Socialist spokesman has suggested that such elections will be
problematic as long as armed rebels promote anarchy. This has fed
fears that the Socialists will not risk elections, but will seek
instead to consolidate power under an interim government.

The U.S. position. The Clinton Administration, which pressured
Berisha into entering a coalition government with his longtime
enemies, must take strong action to assure that the Socialists
abide by their commitment to restore law and order in the
rebellious south and comply with its agreement with Berisha. It
should press them to disarm their rebel surrogates, block attempts
to violently overthrow Berisha, and prevent the establishment of
kangaroo courts or show trials to discredit Berisha and his
supporters. The Administration also should demand that the
Socialists hold free and fair elections safeguarded by
international electoral observers.

The U.S., together with its European allies, should condition
future Western aid to Albania on the full restoration of a
democratic government capable of reining in mafia thugs and
building a prosperous market economy. Unfortunately, this task will
be extremely difficult now that Berisha's pro-Western reformers
have been eclipsed by the former Communists who led Albania into
half a century of repression and isolation. The minor flaws in
Berisha's allegedly authoritarian regime are likely to pale in
comparison to the crimes of Albania's past and future rulers.